Covid-19 impact: UK job losses hit decade-high, worse seen ahead

Topics Britain | UK economy | Lockdown

Finance Minister Rishi Sunak said the government’s support programmes were working but job losses were inevitable
The number of people in work in Britain has suffered the biggest drop since 2009 and signs are growing that the coronavirus will take a heavier toll on the labour market as the government winds down its huge job-protection scheme. Led by a record plunge in the self-employed, 220,000 fewer people were working in the three months through June, official figures showed on Tuesday.
Separate tax data for July showed that the number of staff on company payrolls had fallen by 730,000 since March, sounding the alarm about a potentially much bigger rise in joblessness.

Mounting job losses are expected as Britain winds down its job-retention scheme, which has covered around one in three private-sector jobs. It is due to close at the end of October.

“A real concern is that this is just the first wave of bad news for the jobs market,” said Gerwyn Davies, senior labour market advisor at the Chartered Institute of Personnel Development. “The fact that reduced hiring rather than increased firing of permanent staff is the main cause of the jobs slowdown to date bodes ill for the coming months if more employers turn to redundancies as a last resort.”

Finance Minister Rishi Sunak said the government’s support programmes were working but job losses were inevitable.

“I’ve always been clear that we can’t protect every job, but ... we have a clear plan to protect, support, and create jobs to ensure nobody is left without hope,” he said. A string of companies plan layoffs, ranging from British Airways and London’s Evening Standard newspaper to retailers WH Smith and Selfridges.

The unemployment rate unexpectedly held at 3.9 per cent. But that reflected more people who had given up looking for work and therefore were not considered unemployed, and 300,000 people who said they were working but getting no pay, the Office for National Statistics said.

Economists polled by Reuters had expected the unemployment rate to rise to 4.2 per cent. Last week, the Bank of England forecast the jobless rate would hit 7.5 per cent at the end of this year.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel